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Business Policies and Strategic Management A Recap Session

Presented by : Mithilesh Chauhan 39 Pooja Sharma 40

Strategic evaluations and controls

Strategic planning
Recapitulation : Business strategic planning is the process of deciding on the programs that the organization will undertake and the resources that will be allocated to each program over the next few years.

Strategic planning cont.

Strategic planning is a top management led process very much influenced by the CEO. But no system will function if manager do not perceive it as a vital process with contribution and buy-in.

The 5 stage process is

1. Reviewing/ Updating last plan: results and outcomes will never be exactly as planned, 2. Key assumptions & success factors: change, 3. First iteration of new plan: Numberization, 4. Analysis and repeat iterations: Match goals & programs, 5. Review and approve.

Corporate control over the Businesses

Two basic approaches

Input control

Output/performan ce control

Monitobusiness ring and approving level decision

Setting and monitoring the achievement of the performance targets

Primarly through strategic planning system & capital expenditure approval system

Primarly through performance management system,including operating budgets and HR appraisals

Introduction to strategic evaluation control

Control focuses primarily on strategic implementation. 3 different activities that require planning and control can be defined:
Strategy formulation Goals, Strategies, Policies Planning Coordinating Management control Implementation of strategies Communicating Evaluating Task control Performance of specific tasks Deciding Influencing

Strategy evaluation control does not necessarily require that all actions are as per the previously determined plan; It, however requires inducing people to act in pursuit of own goals in ways that organizations goals are also met Goal congruence.

Management control hinges on the ability to influence human behaviour towards achievement of a firms strategic objectives, i.e.

Human behavior and management control

Goal congruence

Formal processes

Informal processes

Human behavior and management control cont.

Informal Factors
Extrinsic/External: work ethics norms of desirable behaviour that exist in the society of the organization is a part of Country influence Industry influence Regional influence Intrinsic/Internal: o Culture o (Management) style o Informal organization o Communication and perceptions o Cooperation and Conflict

Introduction to strategy evaluation control

Strategic decision making process Scan and assess the external environment --opportunities and threats Scan and assess the internal corporate environment --Strength and weakness Analysis strategis SWOT factors --pinpoint problem areas --review and revise mission, objectives Generate, evaluate and select best alternative strategy Implement seleted strategies via: Program Budgets Procedure Evaluate implemented strategies via feedback

Introduction to strategy evaluation control cont.

Other types of control: ISO TQM Management audit Responsibility centre: Standard cost centre Revenue centre Expense centre Profit centre Investment centre

Introduction to strategy evaluation control cont.

Strategic information planning Enterprise Resource Planning (ERP) Strategic Audit

Introduction to strategy evaluation control cont.

Evaluation techniques for operational control
Internal Analysis
Value chain analysis Quantitative analysis EVE ABC Qualitative analysis

Comprehensive Analysis
Balance score card Key factor rating

Comparative Analysis
Historical analysis Industry analysis Benchmarking

The Parta system PERT CPM MBO MOU